It is to be made easier for shared owners of government grant funded affordable homes that are affected by building safety issues to sublet.
To this end the Government has amended its grant funding guidance for Affordable Homes Programme. This guidance restricts subletting shared ownership properties to ‘exceptional circumstance’. The amendment will make clear that issues of building safety are to be treated as just that: ‘exceptional’ circumstances’.
This, said the Government, will allow shared owners to sublet their homes, with the agreement of their freeholder and permission of their mortgage lender.
To help overcome possible objections from the latter, Minister for Housing Christopher Pincher has now written to mortgage lenders encouraging them to accept subletting applications from affected shared owners.
To reduce the costs involved, Pincher has also requested that mortgage lenders consider extending the period a shared owner can sublet their home before needing to convert to a buy-to-let mortgage.
The minister also asked mortgage lenders to waive the annual 1 per cent premium for shared owners who choose to sublet prior to converting to a buy-to-let mortgage. ‘I understand that you will need to assess your organisational risk profile when considering subletting requests from shared owners. I also appreciate you will need to consider how waiving the 1 per cent annual premium over the course of a consent-to-let period aligns with your responsibilities under competition law. I do, however, hope that you appreciate the position that the affected shared owners have found themselves in with regards to building safety through no fault of their own, and that you will make every effort to approve their subletting requests’.
